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Rebekah Brooks 23, Rupert Murdoch 16, United States 6, Bskyb 4, U.s. 4, Britain 3, New York 3, Newscorp 3, Afghanistan 2, Stowe 2, Milly Dowler 2, Rupert 2, Newman 2, Vermont 2, Honolulu 2, Steve 2, China 1, Russia 1, America 1, Iraq 1,
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  PBS    BBC World News    News/Business.  
   International issues. (CC) (Stereo)  

    July 15, 2011
    5:00 - 5:30am EDT  

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>> this is "bbc world news." funding for this presentation is made possible by the freeman foundation of new york, stowe, vermont, and honolulu. newman's own foundation. and union bank. >> union bank has put it global expertise to work for a wide
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range of companies. what can we do for you? >> and now, "bbc world news." >> the former editor of the "news of the world" newspaper, rebekah brooks, has just resigned following the phone hacking scandal. warning mounts on america's credited -- credit rating. russia orders checks on all river boats after the sinking of the bulgaria, which killed more than 120. welcome to "bbc world news." also in this hour -- a pace setter and a record breaker on day one. the amateur, tom lewis, has begun his second round at the british open. and film star sarah, the possible u.s. presidential candidate is in a new film called "the undefeated."
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>> welcome to "bbc world news." in the past couple of minutes, it's been confirmed that rebekah brooks, the chief executive at newscorp, owned by rupert murdoch, has resigned from her position. she had resisted calls, not least from former "news of the world" journalists for her to resign after the revelations that "news of the world" journalists had been responsible, allegedly, for hacking the phones of, amongst others, a murdered school child, milly douler, and also those of the relatives of servicemen who had been killed in afghanistan and iraq. rebekah brooks has resigned as chief executive of news international.
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aaron is here. a business decision, this one? >> well, look, another shock -- well, in two weeks of shocks we've had coming out of this story. now, this is quite amazing, because yesterday's story was trying to get rebekah brooks and, of course, rupert murdoch's son in front of this hearing committee, where they are expected to be grilled very hard. now, rebekah brooks had said she welcomed to answer the questions, but some of the questions she said she may not be able to answer. now, he's the question, because this is just breaking, we're still basically reading across here and just trying to find out the implications. does this mean now that she has stepped down as the chief of news international, which, for our global viewers, the arm that -- the murdoch arm that runs all the newspapers, which includes the now-defunct "news of the world," which clomesed down last sunday. does she still have to appear and answer or not answer some of these very, very tricky
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questions? so this is a fascinating twist here. of course, we still are expecting murdoch sr. and jr. still to appear before the hearing. but yes, quite a standing look. we'll continue reading across this and trying to get some answers to see if this means she does not have to appear now. >> ok, more business on this story in just a minute, but let's go to the media analyst who's on the line now. roy, surely the right decision, do you think? >> yes, the right decision made rather too late, but the pressure was so great, it was obvious that she would have to go. it comes at a strange point, just ahead of the commons select committee meeting. one wonders now about whether or not she'll attend or what she'll have to say. but it's extraordinary, really extraordinary that rupert murdoch held on to her for so long. she was the lightning rod for criticism.
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the idea that she was initially put in charge of an investigation into herself as it were really begged her to leave. so i think that news corporation will benefit from this, but i think they've taken such a big hit already, it probably won't make that much difference to the public standing, the public in which they find themselves. >> so what do you think really was the overriding factor here? is it a moral decision, media decision, or business decision? >> well, it's obviously a business decision, clearly. but i think other things come into it, and we don't know, we can't be party to the discussions and internal investigations that have gone on. she was editor of "news of the world" during the period in which some of the worst examples of hacking, the hacking into milly dowler, the 7/7 bomb victims' phones, and in view of that, that revelation itself should have led to her resignation.
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it's possible she's resigned a couple of times, it's been rejected, and finally, perhaps on the third occasion, murdoch and his advisors decided, ok, fair enough, it's time she went. >> it's strange, though, isn't it? just a few days ago, speaking to "news of the world" journalists, she said they would understand why the newspaper had to close, because she was privy to information that was going to come out, and yet she held on to her job. presumably it's also got something to do with revelations that are subsequently going to emerge. >> well, she still is privy to that information, and that information is something we'd all like to know about, although i have a fair idea what it is. which i can't -- i'm afraid to say. but anyway, i do think that plays an important role. a resignation from the job doesn't mean she's resigning altogether from news corporation. will she still be on a leash?
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we don't yet know those details. >> so, how do you know this is going to affect news interpret? do you think maybe rupert murdoch has put some pressure on her, having been her great champion, to curry favor back with the british government? >> i have to say, who knows? we don't know. i just don't know whether he's been -- the other day in public, when he was asked what his top priority was, he pointed to rebekah brooks and suggested his top priority was protecting her. so whether he's ditched her or she's done the honorable thing and walked, we'll wait to wait and see. >> thank you very much for that. businesswise, it's such a massive interpret empire. i mean, it is worth tens of billions of dollars. >> absolutely. >> and she was central to the operation here in the united kingdom. >> yes, and interesting to know, just as we heard there in that phone interview, you know, when murdoch landed and he was asked, as he repeated, his
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priority, pointed straight to rebekah brooks. i mean, she was a priority to murdoch. she headed the news international, the arm that ran all these british newspapers, you know, a successful part of the business. but if you break down the sums actually, you know, the newspaper side of the murdoch empire is not where they make their money from. it is from the television side of things, and the big worry now for investors, ok, we've already seen murdoch pull out of that whole bskyb, the british broadcaster, where newscorp holds 39% of, and they wanted the full remaining 61%. they wanted full control of bskyb, because it is a money spinner, a healthy business, and it continues to grow. as i said, that's where they make their money from. given u.s. operations, fox television, fox network, had sales just over $15 billion. the entire group had sales of $33 billion. so you can see fox makes almost
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half of the group sales. and the way on the performance, it was going to generate around a third of newscorp's profit. so that was very important. so we're seeing these strategic, i don't know, these strategic plans. it will be interesting to know whether or not rebekah brooks has another -- has perhaps another spot or will be available for another spot within the murdoch empire. and i have to say, with her going down or stepping down from the top position of the british newspaper side of the business, there was still ideas and speculation swirling that rupert murdoch may very well get rid entirely of his british newspaper business. >> well, he has said that he doesn't want to do that. that was one of his latest statements. his corporation has been buying back some of his shares to try to appease shareholders. there are some legal actions taking place in the united states against the empire.
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will this assuage any of the feelings of those shareholders who are so important to him? >> i think many of the shareholders and investors certainly wanted to see rebekah brooks step down because painting this whole murky picture and scandal that's hanging over the british newspaper side of the murdoch empire. so it will appease, but i tell you what, it won't take any -- it won't lessen any of the action, any of the angst building up in the united states against news international. i mean, when you start talking about the speculation and allegations that possibly 9/11 victims or families of victims were phone hacked, the americans are -- they're after blood. and so, you know, this would open an entire new can of worms certainly in the united states. but look, this is a very interesting, again, another development in this whole
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scandal that has, well, certainly rocked britain in the last couple of weeks and is now starting to rock the united states as well. the murdoch empire is coming up fire from all sides. >> aaron, thank you very much indeed. wf a message, a statement released by rebekah brooks, just give thaw. she says news international, we pride ourselves on setting the news agenda for the right reasons. today, we are leading the news for the wrong one. the reputation of the company we love so much, as well as the press freedoms we value so highly, are all at risk. as chief executive of the company, the statement continues, i feel a deep sense of responsibility to the people we have hurt, and i want to reiterate how sorry i am for what we now know to have taken place. i believe that the right and responsible action has been to lead us through the heat of the crisis. however, my desire to remain on the bridge has made me a focal point of the debate. this is now detracting attention from all our honest endeavors to fix the problems of the past. therefore, i've given rupert
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and james murdoch my resignation. while it has been a subject of discussion, this time my resignation has been accepted. rupert's wisdom, kindness, and advice has guided me throughout my entire, and james is an ince prablee leader who has shown me great loyalty and friendship. i would like to thank them both for their support. i've worked here for 22 years, and i know it to be part of the finest media company in the world. news international is full of talented, professional, and honorable people. i am proud to have been part. team and lucky to have known so many brilliant journalists and media executives. i leave with the happiest of memories and an abundance of friends. as you can imagine, recent times have been tough. i now need to concentrate on correcting the distortions and rebutting the allegations about my record as a journalist and editor and executive. my resignation makes it possible for me to have the freedom and the time to give my full corporation for the current and future inquiries, the police investigation, and
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c.m.s. appearance. i am so grateful for all the messages of support. i have nothing but overwhelming respect for you and our millions of readers. i wish everyone all the best. that's the full statement from rebekah brooks, who has resigned as the chief executive of news international. so, aaron, rupert murdoch has been here in the u.k. for the past couple of days, and yet every day new revelations emerge. you refer to what's going on in the united states, the f.b.i. beginning an investigation into allegations that journalists in his media empire tried to hack the phones of 9/11 victims. what's the share price been doing over the past few days at news corporation? >> well, the share price certainly, since the scandal broke, had fallen some 16%, about just over $7 billion had been wiped off the value of newscorp. newscorp, the parent group, traded in new york and sydney, aurl.
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since that whole scandal broke, so about $7 billion. the day he made that announcement where he was going to completely pull out for now, for now, in quotation marks, pull out of the full bid and takeover of bskyb, we started to see the share price up, and it's remained slightly higher. it hasn't recouped all of the losses since the scandal broke, but it certainly has been doing a bit. i mean, investors were -- they were pleased. i think they had wanted to hear this, this decision by rupert murdoch that he was going to pull out, because for a couple of reasons, mostly because of the scandal, and prior to pulling out, we had heard comments from murdoch, we heard rumors that he was going to fight this tooth and nail. i mean, as i just said a few minutes ago, it's a good money spinner, it's a healthy business. so he was going to fight tooth and nail for it. now, because of the scandal, many investors thought that he may be forced to pay a premium to buy b and had skyb on top of
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the $13 billion offer, he may have had to have paid another $1.5 billion. so, for investors, that's nice. i don't want to see that. so once he dropped out, that was -- for many, that was reassuring. also, it left news international with a nice little tidy sum, a pool of cash, $12 billion, possibly that rising to about $15 billion by the end of the year. so the questions are, what is newscorp going to do with all of that money? some speculating that it will be in part returned to -- in dividends, returned to some of the investors. so they were pleased. thus we started seeing the share price rise. >> can you give us an overall idea of the empire that news international and rebekah brooks, now the former chief executive, oversaw in terms of as a global player? just rebekah brooks' role in news international and that part of news corporation. >> well, she was a darling to murdoch, let's not kid ourselves, but we should also
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remind ourselves that she was head of news international, which simply ran the british newspaper side, the things of "news of the world," which no longer exists, closed down last sunday, "the sun," "the times" newspaper. tiny outposts in the empire. i mean, they made profits every year of around $530 million. the 39% stake that newscorp owns in bskyb makes $540 million. that's just the 39% stake, so you can see, just in the grand scheme of things, that, in the empire, news international was a tiny outpost, but very important, of course, for britain, very important for the british newspaper business. it leaves you dumfounded every day. you know this.
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every day we come into the studio, certainly the past couple of weeks, and it has been one thing after another with this. so i'm still waiting. i'm interested -- you know, the comments she made in her letter stating that, you know, it leaves her now to be free to deal with the investigations, the many investigations, because let's not kid ourselves as well. she may be questioned in the united states. i mean, you know, depending on where these allegations and where the fingers are pointing, was it british newspapers that allegedly hacked into 9/11 victims? so not only will they be facing questions on this side of the pond, they may very well have to all hop on a plane and face questions over in the united states. but it is an astonishing development, and i'm just curious to see how willing now she will be prepared to answer. there are certain questions, especially some of the very
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tough questions that she's expecting to be grilled in this hearing. >> ok, listen, aaron, i need to do more research, because it's been confirmed, there's a new chief executive. for the moment, aaron, thanks very much indeed. you're watching "bbc world news." still to come -- we have plenty more news on the resignation of the chief executive of news international here in the u.k., rebekah brooks. do stay with us. a thaw week -- fresh allegations of the phone hacking scandal as u.s.
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senators call for a full inquiry. there are similar cries from politicians in aurl. is rupert murdoch's global media empire crumbling? join me here on "bbc world news." >> this week on the program, china's billionaires, how did they become so wealthy? will they give any of their money to me, the culture, and identity of singapore. and tim marlow glories in paints. weekend world, a work of art.
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>> this is "bbc world news." the main headline -- the news international chief executive, rebekah brooks, has resigned following the phone hacking scandal. let's recap the final statement from rebekah brooks, confirming her resignation. she says that news international prides itself on setting the news agenda for the
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right reasons. today, she says, we're leading the news for the wrong ones. she continues that as chief executive of the company, she feels a deep sense of responsibility for the people we've heard and that she wants to reiterate how sorry she wants for what's now known to have taken place. she thanks james and rupert murdoch for their support and says, having worked for 22 years for news international, she knows that she's part of the finest media company in the world and thanks all the journalists and people she has worked with in the past and that says her resignation makes it possible for her to have the freedom and time "to give my full cooperation to all the current and future inquiries, the police investigation, and the c.m.s. appearance." and that is part of the final statement of rebekah brooks' resignation as chief executive of news international. a media analyst and columnist for "the guardian" newspaper here in the u.k. is here. she says all the right things in the statement. many people say this was
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inevitable. >> they do, although, you know, convention alley, when rupert murdoch pins her colors so firmly to the masses or to a particular course of action, you know, he's characteristically known for sticking to it. the problem here is two-fold. first of all, everything she has said today would have been true a week ago last tuesday. secondly, the fact that he has changed tack gives all indications that the company is simply being on the run. i mean, they've given up on -- they've they got rid of "news of the world," which they didn't want to do, they've given up on the biggest deal of rupert murdoch's career, the deal for bskyb, which he dent want to do, and now he's been forced to backtrack on the person of whom he said just the other day, when asked in the street, when he first flew back to britain to sort things out, what's your main priority, he pointed to rebekah brooks, touched her on the arm, and said this one, this one as
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opposed to the other one? it was a close, personal, almost intimate description of the woman that he has now let go. >> steve, it's aaron, business presenter in the studio here, alongside adnan. as you said, he put the hand on her shoulder and said, "this one." this one is no longer there. how do you think investors will perceive this move now? is this something they've been wanting, longed for perhaps? >> well, the thing you have to appreciate about news international -- sorry, news corporation, it's a global corporation, but it's built around the personality of one man. you know, investors have fall tonight ends of the earth. they've allowed him to take all manner of risks that no mortal, generally is allowed to. you know, they put up with corporate governance arrangements, but are very strange, all the voting shares in the company belong to the family trust. you know, huge amounts of investors and institutional money riding on the back of what essentially amounts to
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backing rupert murdoch's judgment. the way this has been handled, i mean, if rebekah brooks had gone a week ago or slightly before that, then it would have added to the company's credibility. by holding on to her for this long, it's had the opposite effect. >> absolutely, you're spot on there. we're talking to a lot of our colleagues in the states, a lot of experts over there about the whole contagion, the whole worry now of what's happening in the u.s. and the finger pointing towards newscorp, but you just said it, we've also been talking about, hearing possible management reform in the sense that there are investors, especially stateside, that are starting to worry now that, as you said, as you touched on, that newscorp is one company, kind of one man. >> and here's a quote. i mean, there are two sides of this. if you don't buy rupert murdoch, you don't buy newscorp. and in business terms, they have things that look
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questionable. his commitment to newspapers, in the digital age, looks questionable. quaint, maybe. i'm very pleased for it. we wouldn't have "the times" if it wasn't for rupert murdoch. nevertheless, in the states, one person said, "we hope this is a turning point for the company's strategy and asset allocation as ownership of highly incon quen shall has dropped the important one." and that was the plan to buy sky. first of all, you have confidence in rupert murdoch's ability. secondly, questions about his strategy beginning to come out in the open. a wraw do you think this leaves rebekah brooks' potential appearance on tuesday in front of the parliamentary select committee? >> i'm not a lawyer or proceduralist, but i don't think it makes very much difference. the fact, is all the questions everyone wants to ask her about
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who knew what and when, not least the spotlight, we now know seriously misled by what they were told by news international, whether wittingly or not, all those questions remain, and she is a central character in being able to answer them. that doesn't change just because she stepped down from the job. >> all right. steve, thank you very much indeed. so you're watching "bbc world news." our main story this hour, the resignation as chief executive of news international of rebekah brooks, former favorite of rupert murdoch, who the media magnate has been in the u.k. the past few days, and as you heard, he arrived here saying his priority was rebekah brooks, but after the scandal of allegations that "news of the world" journalists hacked phones of, amongst other people, the murdered school child, milly dowler, and also relatives of the dead
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servicemen in afghanistan and iraq, rebekah brooks has now resigned. we'll have more on "bbc world news" to come. >> make sense of international news at jerryspringertv.com. -- make sense of international news at bbc.com/news. > funding was made possible by the freeman foundation of new york, stowe, vermont, and honolulu. newman's own foundation. and union bank.
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>> union bank has put its global financial strength to work for a wide range of companies. what can we do for you? >> bbc world news was presented by kcet los angeles.
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